Defense Base Act Coverage: Why It’s Mandatory for Overseas Contracts
For businesses pursuing overseas contracts with the U.S. government, one rule is non-negotiable: Contractors must secure Defense Base Act (DBA) insurance before any work begins. Whether you’re deploying engineers to a development site, sending linguists to a conflict zone, or supporting infrastructure projects in allied nations, DBA coverage is a legal requirement and a crucial safeguard.
What Is the Defense Base Act?
The Defense Base Act is a federal statute that extends workers’ compensation protections to civilian employees working on U.S. government-funded contracts outside the country. Although it originated with defense-related operations, the law now applies across industries.
Whether you’re in construction, information technology, security, or logistics, if your project is funded by a U.S. agency and performed overseas, the law likely applies. Even roles that may seem civilian on the surface require coverage — such as a translator stationed on a base, a healthcare worker staffing an international relief effort, or a project manager coordinating logistics.
What Defense Base Act Insurance Covers
Defense Base Act insurance coverage mirrors domestic workers’ compensation in scope but applies to a much broader set of risks. It includes medical treatment for injuries sustained on the job, disability benefits for short- or long-term impairment, and death benefits for employees’ families.
These benefits are triggered by real-world scenarios — like a contractor injured while driving between job sites in Africa or a support technician developing an illness tied to living conditions on deployment. Without proper coverage, businesses risk more than just compliance violations — they risk the livelihoods of their employees and the future of the contract itself.
Who Needs DBA Insurance — and What’s at Stake Without It
Any contractor or subcontractor performing work on a U.S. government contract outside the United States is subject to DBA rules. This requirement applies to U.S.-based businesses as well as local subcontractors operating under U.S. prime contractors. Coverage must be in place before employees arrive on-site.
Skipping coverage isn’t just risky; it’s a breach of federal law. Contractors operating without DBA insurance may face heavy fines, legal liability, and contract termination. It’s a mistake that can jeopardize both your workforce and your business reputation.
Make DBA Coverage Part of Your Bid Strategy
Too often, DBA insurance is an afterthought. In reality, it should be one of the first compliance items addressed before submitting a government bid. Many solicitations require proof of insurance before the proposal is even considered.
Moody Insurance Worldwide works with contractors across sectors to design coverage tailored to their operational footprint and risk exposure. Our breakdown of government contractor insurance coverage essentials explains what businesses need in place before deployment begins.
Protect the People Who Deliver Your Work
Government contracts abroad offer incredible opportunities but also come with significant responsibility. Defense Base Act insurance is a federal mandate that protects lives and keeps your project compliant.
Before you send your team overseas, ensure you’re fully covered. Contact Moody Insurance Worldwide today to get a quote and secure your DBA policy.
FAQ About Defense Base Act Insurance
What is Defense Base Act coverage?
Required by federal law, DBA insurance provides medical, disability, and death benefits to employees working overseas on U.S. government contracts.
Who needs DBA insurance?
Any U.S. contractor or subcontractor with employees supporting federal contracts abroad must carry this coverage.
Does DBA cover subcontractors?
Yes. DBA coverage applies to all tiers of contract work, including subcontractors, regardless of size or scope.
What happens if I don’t have DBA insurance?
You risk steep penalties, possible lawsuits, and the potential loss of your government contract. Noncompliance can also expose your company to long-term liability.
About Moody Insurance Worldwide
We are a specialized, independent insurance agency with deep expertise in government contracting risks. Our team provides comprehensive solutions to help contractors meet federal requirements and protect their operations, both in the U.S. and overseas. In addition to essential Property, Liability, and Benefits insurance, we have specialized knowledge in Defense Base Act coverage, Professional Liability, Director & Officer Liability, and International insurance programs that keep contractors compliant and competitive when bidding on federal projects.